The house magazine of the elite, The [Keynesian] Economist, is remarkably accurate for once in its summary of the Euro’s future:
“The crisis in the euro area is turning into a panic and dragging the zone into recession. The risk that the currency disintegrates within weeks is alarmingly high.”
My only quibble with that quote is that I would have used the word ‘wonderfully’ myself, rather than ‘alarmingly’, but hey, you rarely find perfection in anything.
As to the rest of the article, it’s a good description of what politicians say they’re going to do, but a poor predictor of what they are going to do.
Here’s my saloon bar take:
- Politicians will talk austerity until the cows come home, but when it comes to actually cutting spending, they are far too beholden to vested interests to actually do it. Overall, next year, EU government spending will go up in terms of Euros.
- The best thing for the free people of Europe will be to let the Euro fail, and to call the whole thing off. What would then likely happen would be the creation of a Deutschmark area, under the complete control of Germany, which I would hope would one day become a Gold Deutschmark area, perhaps under the influence of a Swiss Gold Franc. What will actually happen, is that it is in the personal interests of the EU’s politicians to keep the Euro going as long as possible, to keep the ‘system’ running. Just like the Roman Empire, upon which the EU is explicitly based, the people will be sacrificed to enable the bureaucrats to get one last turn in the chariot limousines. In the end, this will bring on the quicker demise of the system, but the bureaucrats hope this eventual collapse will be someone else’s problem down the track.
The only way to keep wasteful spending up and to temporarily extend the life of the miserable Euro, is for the ECB to print trillions of the damn things to soak up all that government spending and to soak up all of that outstanding debt.
This is what they will therefore do.
In the meantime, the best way to preserve your wealth will be to invest in real tangible assets with no counterparty risk, before that wealth is inflated away to pay for all of this political chicanery.
In the meantime, you better make mine a large G&T, while I can still afford them.